The Keyhole makes observations about consumers, brands, ads, & marketing, through a predictive customer loyalty lens. Most marketing is ineffective to today's bionic consumer, given undifferentiated products, loss of "brandness," & hard to come by profits. Marketers talk about "engagement" but nobody seems to be doing a very good job measuring or integrating it into what they do & it shows! The Keyhole opens a dialogue on this subject & suggests real-world solutions with the marketing community.

Monday, March 30, 2015

The upcoming holidays got us thinking about, well, holidays.
And special events. Holidays provide us all with the chance to celebrate
something special and special events provide brands with an opportunity to emotionally
engage consumers.

While big events can be big deals, big event advertising is
expensive, and to be successful brands have to leverage real category emotional
values, because if they don’t, an ad may entertain viewers, but it won’t engage
customers.

Want to see how big holidays like Easter and Thanksgiving,
and big events like Super Bowl, the Academy Awards, the Olympics, and FIFA
World Cup worked for brands like Budweiser, Pepsi, McDonald’s, M&M’s,
Target and Beats by Dre?

We invite you to read “Engage emotionally with big event ads,” a Brand Keys study that measured emotional engagement and
entertainment values of major brand advertising to see what correlated best
with marketplace ROI, appearing in this month’s Admap.

The bottom line for brands looking to successfully invest in
holidays and special events: Ads that entertain but don’t emotionally engage will
leave brands with nothing to celebrate.

You, on the other hand, celebrate holidays and every day to
your heart’s content.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, March 25, 2015

Commercial ratings for broadcast and
cable networks were down about -12% each YOY. That’s the 5th month
in a row. On the other side of the equation, consumers are complaining about
having to pay for 500+ TV channels.

On the ratings side of things,
industry pundits suggested Nielsen is having a hard time figuring out how to
count viewing that doesn’t actually take place on a TV set. Maybe Nielsen could
issue everyone little spiral pads and pencils and viewers could make notes what
they’re watching on different mobile devices and mail them in. Or maybe
something with a stylus. Other analysts have offered up the thought that the
changes in commercial ratings and a desire for a smaller number of select shows
are probably due to shifts in viewership habits à la mobile devices.

Well, some answers
may be on the way that will change all that no matter what platforms consumer use.
It’s something called “skinny bundles,” or Web services from providers such as Apple
or Dish that offer just a small selection of very popular channels at a much lower
prices. These skinny bundles – so
different from the traditional 500+ channel, pay-TV that ends up pairing weaker
channels with stronger ones to boost revenue – feeds right into elements that
emotionally engage consumer with streaming video.

The two biggest emotional engagement
drivers that control consumer-viewing behavior deal with a desire for a range
of original entertainment choices and
providing viewers with an opportunity to “binge” on new shows, a relatively new
value to the category and something that has become critical to audience
preference and choice, particularly as it has to do with streaming video. Fees
do come into play because consumers are tired of paying for stuff they never
watch, and smaller packages – especially
if producers are building them to meet binge expectations – puts real pressure
on content producers.

Streaming video is currently seen as
better meeting overall consumer expectations so that their perception of the
Price-Value equation ends up looking better than cable. And as consumer
behavior correlates very, very highly with how well a brand meets consumer
expectations, we weren’t surprised with the broadcast and cable declines.

For Video Streaming, here’s how
actual viewers ranked their own services á la their very high expectations:

1.Netflix

2.Amazon

3.iTunes

4.Google Play
/ Hulu

5.Crackle /
YouTube

6.Veoh / Vimeo
/ Vudu

7.Iwatchonline

8.Blockbuster
/ Cinema Now

This is where the
issue of “brand” comes into play. Brand – however you define it – ultimately
brings with it an “added-value” that similar offerings can’t make or can’t
believably make. Netflix, for example, has increasingly become associated with
new, highly creative original content like House
of Cards, Unbreakable Kimmy Schmidt,
and its newest offering, Bloodline. They’ve
been upping the entertainment and consumer engagement ante by releasing nine new
shows this year alone. To keep up other video streaming services will have to
follow.

So what’s coming to
a screen near you? Apple is going to debut an online service this year with
about 25 channels and is in talks with broadcasters ABC, CBS and Fox to also provide
Web-based TV. Viacom is experimenting with direct-to-consumers over the
Internet. Dish's Sling TV currently offers 20 channels for $20 a month. Cable
companies, already struggling as more viewers move to online streaming video
are pushing Web-accessed skinny bundles, with local channels and HBO for as low
as $40 a month for the first year to try and keep customers.

And the paradigm
shifts keep coming! The availability of
skinny bundles may lead more people to abandon all those large TV packages that
pose a threat to networks that aren't included in the new online TV services. Niche
networks with already-slimmed down audiences are clearly at risk in a
skinny-bundle world and may need to offer their programming over the Web.

Today the average
home in the U.S. receives 189 TV channels. Currently advertised packages have a
lot more, but again, most of which viewers never watch, let alone name. Guess
how many they actually do watch. If you said, “17,” you’d be correct. But with
binge viewing growing, that number may be too restrictive even for the most
budget-conscious viewer. Maybe a “medium bundle” with a slightly slower binge
metabolism will be the answer.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Thursday, March 19, 2015

This past January, Brand Keys announced the top brands that
36,605 US consumers found to be most emotionally engaging. That meant consumers
saw those brands as best meeting their very high expectations. It also meant
that those brands were going to very profitable, and included Dunkin’, Hyundai,
Apple, Netflix, AT&T, Amazon, Chipotle, and Discover. Unfortunately, as
with all lists, there’s a top and a bottom, and this week Brand Keys released
the list of the 10 least-engaging brands of 2015.

This is the kind of list that you’re going to find yourself
looking at it, nodding your head, while a small voice whispers “Well, sure, I
can see that,’ or ‘yeah, they really missed something there,” or “they couldda
been a contender if they just could have gotten someone to buy something. Or anything!”
That’s just the rational market effects making themselves felt. The brands just
didn’t do well.

The brands ended up on the bottom of their respective
categories because they were unable to meet the very high emotional
expectations consumers bring with them to the marketplace and the brand
engagement process and, well, to every category. You can’t hide those results.
Sure, they show up in the marketplace and on profit-loss statements, but they
also show up in how consumers see the brands and, more importantly, how they
feel about the brands.

This year’s 10 least-engaging brands included the following
(in reverse order, beginning with the brand with the lowest emotional
engagement strength, versus their Category’s Ideal, calculated to be 100%.
Brands that appeared on last year’s list are noted along with additional,
associated emotional disengagement showing up this year.

Blackberry (25%, down another 26% from 2014)

Radio Shack (34%)

Blockbuster On Demand (37%)

Kobo (40%)

Sears (42%, down another 22% from 2014)

Tylenol (46%)

McDonald’s (49%)

Abercrombie & Fitch (50%)

Coty Cosmetics (53%, down another 18% from 2014)

Budweiser (58%)

Independent validations have proven that brands that better
meet consumer expectations always win. They always see better consumer behavior
toward the brand and should axiomatically result in greater sales and profits.
But the reverse is equally true. Others lose badly. Nobody on the ‘Least
Engaging List” is making money or growing share or making profits or creating
any reasonable level so emotional engagement with their customers, unless
they’re selling off assets – a short-term strategy at best!

There’s a saying that goes, “losers make
promises they break. Winners make commitments they keep,” but when it comes to
emotional engagement, it usually turns out that the losers don’t really understand
what promises to make!

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, March 11, 2015

For years we’ve written how emotional engagement and loyalty
metrics were “leading indicators,” that is to say, they were measurable factors
that change before the economy starts to follow a particular pattern or trend. To
be more precise, emotional engagement and loyalty metrics are leading
indicators of consumer behavior rather than economic indicators – indicating the
pattern of how consumers will behave toward a brand – positively or negatively
– 12 to 18 months down the road. Best example to date, and no surprise to us,
Apple took the lead in the 4th Quarter as the #1 smartphone seller in the
world.

Apple had the highest emotional engagement quotient in our
2014 Customer Loyalty Engagement Index (CLEI) for smartphones, and we expect
nothing but increased growth this year too. Why? They were once again #1 in this
year’s CLEI. Samsung was #2 and Lenovo was #3 and, while we do not position emotional
engagement and loyalty metrics in the strict rubric of “market models,” they continue
to act as leading indicators of consumer behavior. They can be used as input to
traditional market models, but as they correlate so highly with behavior, it
shouldn’t come as a surprise to anyone that from an actual market perspective, Apple
ended up selling one out of every 5 smartphones in the world last quarter.
That’s 75,000,000 phones, so a lot!

To be fair, Samsung has been at the top of our list in past
years, but as markets follow consumer behavior, its market share is down 10%
YOY. From an absolute sales perspective Samsung sold 2 million fewer smartphone
in the same quarter, so also a lot. But the real value of real emotional
engagement metrics is that they allow us to look at the expectations consumers
hold for what drives consumer behavior, loyalty and sales in the marketplace,
and those insights would suggest that Apple’s response to consumers’ increased
expectations for larger screens and slimmer cases, was the biggest contributor
to upsetting Samsung’s title and market share.

Axiomatically, as higher emotional engagement and loyalty always
results in better consumer behavior toward a brand, i.e., more sales, purchases
of other branded products, and other good things that increased, positive
consumer behavior brings with it, the company ought to be very profitable. And
Apple was. They reported a quarterly profit of $18 billion, the largest in
their corporate history. Emotional engagement leading-indicators! You’ve got to
love them!

Because as they say about engagement metrics, time always
tells. And as the Apple brand is currently becoming so closely connected to
time, watch for our analysis of Apple’s watch introduction too. Engagement of
any kind isn’t static and it’s worth remembering that this time, last year was
a different time too!

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, March 04, 2015

No, it’s not a new promotion, but it is the latest excuse
for J.C. Penney’s holiday losses. OK, sure, the market hasn't’ been at its
best, but shares of J.C Penney tumbled last week after the ever-struggling, emotional
engagement-deficient retailer posted a loss for the holiday quarter, despite
improving category sales trends.

We can’t quite figure out why people were surprised about
the results, which was the way it was spun in the press. But we weren’t. Surprised,
we mean. J.C. Penney had been at the bottom of our Customer Loyalty Engagement Index for a while now. A long while and rankings on our Index correlate very
highly with how consumers are going to behave toward a brand, so being at the
bottom of the list meant that it wasn’t likely that consumers were going to
swarm to the store in the coming months. And they didn’t, a kind of retail
version of the old Yogi Berra observation, “if the shoppers don’t want to come
to the store, you can’t stop’em!” Well, actually, you can stop them. Just
continue to market and brand just the way J.C. Penney has been doing for a
while now!

You can also blame someone else! That’s always easier than
actually coming up with an authentic and emotionally engaging strategy for the
brand. Despite the improving sales trends seen by other retailers, CEO Mike
Ullman noted in a conference call last week that the company is “still trying
to recover from the self-inflicted wounds of the previous strategy.” The wounds
Mr. Ullman was referencing were those of ex-Apple VP Ron Johnson, who, to be
sure, made a muck of things when he was JCP CEO, and was a real nuisance of himself.
We blamed him for the JCP debacle back then too. But to be fair, that was more
than two years ago, and in a marketplace that moves at the speed of the
consumer, Mr. Ullman et. al. haven’t exactly made many inroads. Maybe a tiny
in-path, but not much more than that.

According to this year’s Customer Loyalty Engagement Index,
J.C. Penney, –perennially ranked last in the Department Store category – has
moved up to – wait for it...next-to-last. Just ahead of Sears whose same-store sales were down
nearly 10%, so a dubious achievement at best. But look, any increased level of
emotional engagement isn’t something to be discounted, no pun intended, and our
January 2015 category rankings look like this:

Marshall’s / TJ Maxx

Macy’s

Kohl’s

Dillard’s

J.C. Penney

Sears

For the quarter, J.C. Penney said it lost $59 million, or 19
cents per share and shares slid almost 10% in aftermarket trading to $8.20. So the
change of rank on the list is a precursor of some progress as regards consumer
emotional engagement with the brand, a tiny glimmer of light at the end of the
tunnel.

But as writer and social commentator Havelock Ellis noted,
“What we call ‘progress’ may just be the exchange of one nuisance for another
nuisance.”

And when your brand is wracked with nuisances like consumer disengagement,
problematic product mix, confusing pricing strategies, and undistinguished and
indistinguishable brand positionings and promotions, we’re thinking odds are 6
to 5 that light at the end of a tunnel really is an oncoming train.

Smart marketers never bet against emotional engagement
metrics.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

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The Keyhole: Peeking at 21st Century Brands

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About Us

Robert Passikoff, founder and president of Brand Keys, is a sought-after speaker and global thought leader on engagement and loyalty. He has pioneered work in these areas, creating the Customer Loyalty Engagement Index and the Sports Fan Loyalty Index. New York University’s communication school has declared Dr. Passikoff “the most-quoted brand consultant in the United States.”